COG Financial Services - FY 2024 Financial Results - 28 August 2024
COG FINANCIAL SERVICES LIMITED (COG) Share Update August 2024 Tuesday 27th
COG Financial Services Reports Strong FY 2024 Results with 2% Increase in NPATA
COG Financial Services Limited (ASX: COG) has reported its financial results for the fiscal year 2024, showcasing a strong performance with a 2% increase in Net Profit After Tax and Amortization (NPATA) attributable to shareholders.
Instant Summary:
- Revenue increased by 36% to $495.6 million.
- EBITDA to shareholders grew by 9% to $37.1 million.
- NPATA to shareholders rose by 2% to $24.2 million.
- Earnings Per Share Adjusted (EPSA) remained steady at 12.56 cents per share.
- Final dividend declared at 4.4 cents per share, with a payout ratio of 67.7%.
Financial Performance
COG Financial Services reported a revenue increase of 36% to $495.6 million for FY 2024, driven by both organic growth and acquisitions. The company's EBITDA to shareholders also grew by 9% to $37.1 million, reflecting strong operational performance across its segments.
The NPATA to shareholders rose by 2% to $24.2 million, up from $23.7 million in FY 2023. The Earnings Per Share Adjusted (EPSA) remained steady at 12.56 cents per share, indicating consistent profitability. The final dividend declared was 4.4 cents per share, with a payout ratio of 67.7%, providing a dividend yield of 7.5%.
Segment Performance
The company saw significant contributions from its Novated Leasing segment, which delivered outstanding results. Finance Broking & Aggregation and Asset Management & Lending also reported strong business volume growth. The acquisitions of National Finance Choice (NFC) and United Financial Services (UFS) further bolstered the company's performance.
COG's primary sectors in infrastructure and construction have held up strongly despite the 13 Reserve Bank of Australia (RBA) cash rate increases since May 2022. The Net Assets Financed (NAF) grew by 15% on a prior comparative period (pcp) basis.
Acquisition Strategy
COG continued its acquisition strategy, securing targets at the right price. Key acquisitions since 1 July 2023 include NFC and UFS through COG Aggregation, a 20% interest in Centrepoint Alliance Limited (CAF), and the salary packaging business known as Community Salary Packaging through Paywise.
Dividend and Capital Management
The Board declared a final dividend of 4.4 cents per fully paid ordinary share, with a total dividend of $8.6 million to be paid on 2 October 2024. The dividend will be 100% franked, and the Dividend Reinvestment Plan (DRP) will apply, offering shares at a 2.5% discount.
COG's capital management remains efficient, with a strong cash position and a $31 million acquisition finance facility established with a major Australian bank. The facility has a revolving feature, providing flexibility for future acquisitions.
The financial results reflect COG's strong operational performance and effective acquisition strategy. The 2% increase in NPATA and steady EPSA indicate consistent profitability, which is likely to positively impact the company's stock price. The final dividend declaration and efficient capital management further enhance investor confidence.
Investor Reaction:
Analysts are likely to react positively to COG's strong financial performance and effective acquisition strategy. The steady EPSA and increased NPATA are seen as indicators of consistent profitability, while the final dividend declaration provides additional value to shareholders.
Conclusion:
Investors should consider COG Financial Services' strong financial performance and strategic acquisitions as positive indicators for future growth. The company's efficient capital management and dividend policy further enhance its attractiveness as an investment. Stay tuned for further updates and assess the potential long-term impacts on your portfolio.